The clause allows the board to invest assets in order to manage its affairs prudently. The Pensions Compensation Board has a similar power to invest funds that are surplus to its immediate requirements under section 85 of the Pensions Act 1995.
The pension protection fund board is required to appoint fund managers in relation to investing assets to manage its affairs prudently. The current wording of clause 87(2) requires the board to appoint two, and only two, fund managers to manage investments. This minor Government amendment will require the board to allow at least two fund managers to carry out the functions. The value of the pension protection fund's assets is likely to be significant in time. It is only reasonable, therefore, that the board should have the flexibility to appoint the number of fund managers that it thinks is required to maximise its investment returns and implement its investment strategy.
The amendment will enable the board to ensure that its fund managers have the breadth of knowledge, experience and expertise to manage the fund's assets to the best possible standard. We consider it appropriate for the board to have at least two fund managers, for reasons of propriety.
Amendment agreed to.
Question proposed, That the clause, as amended, stand part of the Bill.
I am conscious that the board of the pension protection fund will take over the functions of the current Pensions Compensation Board. I assume that a separate levy to that will continue. Is it intended under the Bill that that fund will be managed separately from the main fund of the pension protection fund? I imagine that that must be so. Is there a separate provision? I am slightly puzzled that the matter is referred to as if there is only one set of investments, when it is likely that there will be two.
The answer is yes—or two yeses. The new fund will take over the compensation regime from the previous, or existing, board, and there will be a separate fund to be managed. Mercifully, because of relative lack of fraud, the fund has not needed to be gigantic. The levy has been incurred only from time to time.
Question put and agreed to.
Clause 87, as amended, ordered to stand part of the Bill.